The 2020-21 Budget: California Arts Council

The 2020-21 Budget: California Arts Council Summary Department Overview. The Arts Council conducts a range of activities in order to support arts in California. The Arts Council’s enabling legislation directs it to (1) encourage artistic awareness and expression, (2) assist local groups in the development of arts programs, (3) promote the employment of artists in both the public and private sectors, (4) provide for the exhibition of artworks in public buildings, and (5) ensure the fullest expression of artistic potential. In carrying out this mandate, the Arts Council focuses its efforts on the development of various grant programs to support artists and organizations. In addition, the state budget has recently included funds for the Arts Council to distribute to specific museums and other cultural institutions. Governor’s Proposed Budget for the Department. The Governor’s budget proposes $49 million, mostly from the General Fund, for support of the Arts Council in 2020-21. This amount represents a net decrease of $26 million (35 percent) from estimated current-year expenditures. This decrease is primarily due to the expiration of $27.5 million in one-time grants to museums and cultural institutions provided in the 2019-20 Budget Act. As we discuss in this brief, the Governor’s budget proposes $10.5 million from the General Fund on a one-time basis to expand and extend two existing Arts Council pilot programs — one focused on state-designated cultural districts and one focused on disaster preparedness. LAO Recommendations. In order to facilitate the Legislature’s evaluation of these extended pilots when they are complete, we recommend that the Legislature (1) establish clear goals for the pilots and (2) direct the Arts Council to develop and evaluate measureable outcomes related to the goals prior to requesting additional funding for these programs. GABRIEL PETEK LEGISLATIVE ANALYST FEBRUARY 2020 analysis full gutter 2020-21 BUDGET ARTS COUNCIL PROPOSAL BACKGROUND district pilot program. In July 2017, the Arts Council designated 14 areas across the state as cultural districts. Starting in 2017-18, the Arts Council Cultural District Pilot Program awarded each of these districts $5,000 stipends Statute Required Arts Council to Develop per year for two years as an incentive to participate Cultural District Program. Chapter 396 of 2015 in the pilot. To date, the Arts Council has spent (AB 189, Bloom) directed the Arts Council to roughly $300,000 to fund these stipends and create a cultural district program. It defined a has incurred costs related to program support, state-designated cultural district as a certified development, and evaluation. geographical area with a concentration of cultural Evaluation of Cultural District Pilot Provided facilities, creative enterprises, or arts venues that Recommendations. In September 2019, a does any of the following: consultant retained by the Arts Council issued a report evaluating the cultural district program. The • Attracts artists, creative entrepreneurs, and evaluation found that while the design of the pilot cultural enterprises. was sound, it did not fully reflect California’s racial • Encourages economic development and and ethnic heritage, lacked sufficient financial supports entrepreneurship in the creative support, and lacked clear goals and expectations. community. Accordingly, the report provided several • Encourages the preservation and reuse recommendations, including increasing the diversity of historic buildings and other artistic and of districts, adding more financial support for the culturally significant structures. districts, and providing clearer statutory guidance • Fosters local cultural development. on the goals of the program. • Provides a focal point for celebrating and Disaster Preparedness Pilot Program strengthening the unique cultural identity of the community. Arts Council Established Disaster • Promotes opportunity without generating Preparedness Pilot Program. In 2019-20, displacement or expanding inequality. as a response to recent disasters, the Arts Council began a disaster preparedness pilot Additionally, Chapter 396 directed the Arts aimed at building the ability of arts and cultural Council to create a competitive application system organizations, artists, and communities at large for certifying state-designated cultural districts, to respond effectively to emergencies and provide technical and promotional support for these disasters that may affect their communities. As districts, and collaborate with public agencies and part of this pilot, the Arts Council provided $5,000 private entities to maximize the benefits of these stipends to each of 19 participating counties districts. Notably, the legislative committee analysis and also paid for various costs associated with of Chapter 396 estimated that the measure would providing training workshops for participants. only have minor and absorbable costs associated These training workshops provided information with the council’s administrative activities. The on disaster preparedness and sought to develop legislation did not appear to envision the state networks of individuals and organizations to providing direct financial support to cultural preserve arts-related resources and artifacts during districts. disasters. To date, the Arts Council has spent Arts Council Established Cultural District Pilot roughly $180,000 on this disaster preparedness Program. In response to Chapter 396, starting pilot. In November 2019, Arts Council staff in 2015-16, the Arts Council began dedicating conducted an assessment of the pilot focusing on some of its operating funds to create a cultural 2 LEGISLATIVE ANALYST’S OFFICE analysis full gutter 2020-21 BUDGET surveys of grantees that participated in workshops. the program risks not achieving the goals of For example, the assessment found that 63 percent Chapter 396. believed the workshop they attended will benefit Pilots Need Clear Goals and Measurable their work. Outcomes. One of the main purposes of extending these pilots as proposed should be to gather GOVERNOR’S PROPOSAL sufficient information to enable the Legislature to determine whether—and at what level—to Budget Includes $10.5 Million General Fund continue funding the proposed activities on an for Expansion of Two Pilot Programs. The ongoing basis. However, it is unclear whether Governor proposes additional funding to extend simply extending these pilots as proposed without the cultural district and disaster preparedness further statutory direction to the Arts Council would pilot programs for a few years. The funding also provide the Legislature with adequate information supports the expansion of these pilots to more to make these assessments. participants and increases the amount of financial One reason for this is that the pilot programs support provided to each participant. Specifically, lack clear, specific programmatic goals. the Governor’s proposal includes increased funding Accordingly, there would be benefit in refining and for: prioritizing these goals if the Legislature decides to • Cultural Districts ($9 Million). Funding would spend millions of dollars on the programs, as this support stipends of about $100,000 annually would help ensure that funds are used to achieve for three years for 30 cultural districts (14 the Legislature’s priorities for the programs. existing districts and 16 new districts). Funding A second reason is that—absent statutory would also support technical assistance and direction to the Arts Council—the evaluation of evaluation, as well as additional districts. these pilots may not include the type of measurable • Disaster Preparedness ($1 Million). Funding programmatic outcomes that would be valuable for would support stipends of roughly $10,000 the Legislature as it assesses whether to provide annually for two years for each participating ongoing support for these pilots. Specifically, the county (up to all 58 counties). Arts Council indicates that it expects that the evaluations of the extended pilots would be similar • Administrative Support ($500,000). Funding to those conducted for the initial pilots. However, would support administrative costs for the two these evaluations generally failed to include pilots described above. measurable programmatic outcomes, instead focusing on qualitative assessments and the results of participant surveys. ASSESSMENT RECOMMENDATIONS Request Generally Appears Reasonable, If Consistent With Legislative Priorities. We Establish Clear Goals for Pilots. Given the find that it is reasonable for the Legislature to significant funding increase proposed by the extend the Arts Council’s pilots if supporting Governor for these pilots, it will be important state-designated cultural districts and facilitating for the Arts Council to have clear direction disaster preparedness within the arts community on the Legislature’s expectations for the pilot are legislative priorities for General Fund resources. programs. For example, Chapter 396 references We also find that it is reasonable to expand these the goal of encouraging economic development pilots if such an expansion is a legislative priority, and supporting entrepreneurship in the creative particularly given the findings of the September community. However, the pilot could benefit from 2019 evaluation of the cultural district pilot, which clear legislative direction regarding whether all found that if additional funding is not provided, districts are expected to encourage economic development and entrepreneurship and, if so, in www.lao.ca.gov 3 analysis full gutter 2020-21 BUDGET what specific ways (for example, through increasing Direct Arts Council to Develop and Evaluate the number of artists or art-related businesses in Measurable Outcomes Related to Goals. Once the district). Accordingly, we recommend that the the program’s goals are clarified, we recommend Legislature adopt budget trailer legislation that that the Legislature direct the Arts Council—through would provide this direction. We note that this budget trailer legislation—to develop, track, and recommendation is consistent with the consultant report measurable programmatic outcomes related evaluation of the cultural districts, which found to these goals prior to requesting additional funding that all program stakeholders would benefit from for these programs. For example, if encouraging greater clarity about goals and expectations and entrepreneurship in the creative community by that districts’ efforts can be better served by increasing the number of artists or art-related well-articulated requirements for fulfilling their state businesses in the district is a key goal for the designation. Legislature, the Arts Council should establish a methodology for quantitatively measuring the number of artists and businesses (compared to similar areas that were not designated as districts), along with clear expectations for awardees about the size of the increase in the number of artists and art-related businesses that is expected in order to show success at the completion of the pilot. LAO PUBLICATIONS This report was prepared by Helen Kerstein, and reviewed by Drew Soderborg and Anthony Simbol. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 4 LEGISLATIVE ANALYST’S OFFICE